Operations Management - Essay Example

Operations Management Ans The basic difference between Macro and Micro is that, a macro includes many micros, but not the vice-versa. A number ofMicro operations therefore make way for one Macro operation. And a number of Macro operations in turn complete the entire business process. For a University, micro level operations are generally taken care of by the individual faculty teachers, staff members or the students, while macro level operations are looked after by departmental heads, administrative officers or Classes. Macro operations are the aggregate variables addressing the state of the whole university. In the micro operations each component of the system is considered for its effects on the system owing to certain properties. The micro-theorists make constraining assumptions about behaviors and their possible outcomes to allow the desired degree of mathematical precision. On the other hand in the Macro operation links between the theory and any description of agents or institutions are more tenuous and contrived. The macro operations deal with major policy matters. Some examples are; Universities or for that matter any organisation, while undertaking the exercise of developing budgets (Macro level operation) generally make use of some standard budget development system. Such a system is used by every department to present their own budget requirements for the upcoming financial year (Micro level operation). This budget may include both salary and non-salary related elements, critical to the university's operations. Similarly, taking examination, preparing result of each subject for each student is a micro level operation, while preparing the result for the entire class and subsequently for the department and university is a Macro level operation. In a university, students are the customers. These customers are on the lookout for a quality education. For this they pay the requisite fee, devote their valuable time and energy. The support staff, libraries, laboratories, departments etc. are the suppliers of information which reaches the student to learn through the tutors with the help of a process called teaching or student-tutor interaction. Micro level operations are concerned more with details of the input specifications, output specifications, individual supplier specifications buyer specification, while Macro level operation deals mainly with product, supply and market. For a bigger organisation having a multinational presence, the market of one particular segment, state, nation form the micro level parameters while the consolidated economics make up for macro level factors. Micro level operations keep track of operations at an individual, resource, process and structure level, while macro level operations are concerned with only the system approach. Ans2 Operations manager has a multifaceted job profile. He's concerned with providing a strategic direction to the organisation. He is supposed to1; Improve the efficiency of the operation Improve control of service levels and quality Set service level agreements for end-user applications and for services provided Improve relationships with end-user departments Develop staff potential An operations manager is supposed to carry out all such tasks with the helps of the reporting, planning, and control functions, being done by other supportive departments. Therefore an operations manager should be concerned with the entire network as he has to take input from different nodes of the network to arrive at the overall objective. From the operations manager's perspective, the overall objective of the operations subsystem is to provide capabilities for meeting the organisation's goals and strategy. The subgoals of the operations subsystem can be attained through the decisions that are made in various operations areas. Each decision involves important tradeoffs between choices about product and process versus choices about quality, efficiency, schedule and adaptability. In fact the role of operations manager has been on an increase with increasing activity. With increasing competition every organisation tries to provide services, products or in some form or other. Operations management and operations strategy is supposed to add value to such services and products. Products are brought out with unique features, good quality etc, while services oriented businesses now try to do the value addition by way of providing a valuable experience while dealing with the customers. For example, TESCO is one of the world's leading international retailers. The Operations Manager in TESCO, is supposed to; Keep tab of the ways and means how services are being delivered and the changes taking place with time e.g. attaching smart tags on the products help makes the bill generation exercise less time consuming meaning lesser time for the consumer in the queue. Make use of the latest as far as changes in the technology are concerned. Keep updating its service strategy in line with the changes in customer preferences. Customers with busy, stressful lives increasingly want simple choices. Keep an eye on competitor's strength. Competitors of TESCO, like Sainsbury, Asda, Wallmart will make matters worse for the company if Tesco doesn't keep positioning its competitive strategies depending upon the strategies of the competitors. Check the availability of alternative services. Online stores have become a very convenient alternative now a days. The operations strategists at Tesco have therefore ventured onto the net as well. Make use of the latest in communication technology. The customer prefers to remain in touch while preferring not to be hassled. For example, Wireless fidelity or Wi-Fi is a communication technique extensively used by many companies for being 'always in touch' with clients, employees, service providers etc. The service oriented industries in particular are the one's reaping maximum benefit out of this technique. It is the technology which enables streaming media, e-mail access, real-time messaging etc. Keep track of the changes in the rules of the game. 'The war' they say, 'is planned and executed in war-rooms'. Therefore an operation manager is supposed to keep himself updated in order to come out with an appropriate response at an appropriate time. Ans 3 Competitive marketplaces require people at all levels in an organization to think of ways to continuously improve the products or services that they deliver to customers. Japanese manufacturers are known to be the pioneers in generating quality consciousness amongst the producers as well as customers. Thanks to the Japanese unconventional approaches the manufacturing and services sector came to know about, the terms like, Kanban, just-in-time (JIT), kaizen and total quality management (TQM). Japanese companies have displayed a better resolve to withstand competition and quite successfully took over markets in America, Europe and Asian countries. In fact the history of Japan since World War-II is known as the history of a developing economy, especially manufacturing. After WW-II, Japanese economy was in shambles. With destruction all around, only concrete or stone buildings in many of the major cities like Tokyo, Osaka, Yokohama and Nagoya, the Japanese economy faced the challenge of transition from a wartime to a peacetime economy with very few resources. This scarcity of resources was the key factor in the evolution of simple and unsophisticated technologies and innovative management philosophies. Even today Japan believes in central industrialized planning instead of giving playing into the hands of free market economy. The just-in-time philosophy is a set of methods in manufacturing emphasizing reduction in waste, value addition, TQM and devotion to the customer. This way Japanese manufacturers are successfully able to reduce the; Waste of overproduction: Eliminating by reducing setup times, synchronizing quantities and timing between processes, visibility, compacting layout etc. Waste in waiting: Synchronization of work flow and balancing the uneven loads with flexible workers and equipment helps in reducing waiting time. Waste of Transportation: Well planned layouts and locations helps in making the transportation more efficient. Waste of processing itself: A well thought out plan will help in identifying the need of a particular product or process. Waste of stock: Such a wastage can be reduced by shortening setup times and reducing lead times, by synchronizing work flows and improving work skills and even by smoothening fluctuations in demand for the product. Waste of motion: Motions of economy and consistency were studied beforehand, which helps in improving productivity and quality. The decision weather a particular type of motion requires mechanization or automation can be arrived at once the economies of going in for such a decision are studied and analyzed. Waste of making defective products: The production process is developed in such a way that it prevents the waste of defects. It works on the premise that 'at each process, accept no defects and make no defects'. Taking a cue from the Japanese Just-in-Time's approach of reducing the seven wastes, US companies came out with the term Value-Added Manufacturing process, which works of the premise that 'any step in the manufacturing process that does not add value to the product for the customer is wasteful.' Ans 4(a). Materials Requirement Planning (MRP) is a scheduling procedure for manufacturing processes having several levels of production. As such, it is geared towards meeting the end-item outputs prescribed in the master production schedule. MRP determines a schedule for the operations and raw material purchases depending upon the information about the production requirements of finished goods, the structure of the production system, the current inventories for each operation and the lot sizing procedure for each operation. MRP model determines the demand of a product using orders obtained from the sales department. MRP Provides; Inventory Reduction: Once the operations manager comes to know about the requirement of the number of components and the time when it is needed, the manager can initiate the process of procuring the component. Reduction in Production and delivery lead times: MRP identifies the materials and component quantities required, timings, availabilities & procurement and production action required to meet delivery deadlines. This helps in avoiding delays in production. Realistic Commitments: With the helps of MRP production department can give time information to marketing about likely delivery times to the market. This results in realistic delivery promises, which in turn enhances customer satisfaction. Increase in Efficiency: MRP gives ample scope of close co-ordination amongst various work centers as products progress through them, as it focuses on having all components available at appropriately scheduled times. MRP is a therefore a set of procedures for converting forecast demand for a manufactured product into a schedule for obtaining components, subassemblies, and raw materials. On the other hand Economic Order Quantity (EOQ) or Economic Batch Quantity (EBQ) on the other hand, focuses on the amount of orders that minimizes total variable costs required to order and hold inventory. It is least bothered about realistic commitment or customer focus. 4 (b). It EOQ/EBQ method is very simple to execute, but it is based on some unrealistic assumptions. The basic EOQ model was based upon the assumption that demand is constant while in real life this is far from the fact. Further The EOQ model does not take into consideration the demand pattern of the end product before determining the inventory levels of parts and materials. The demand patterns may change depending upon the climatic conditions, competitive environment, some political upheavals, some seasonal disturbances like floods, rains etc. EOQ is basically an inventory management technique, while MRP gives emphasis on customer and efficiency in the overall process chain. EOQ works on the philosophy of quickly replenishing the inventory, while in MRP the orders are placed as late as possible, but never allowing a stockout. This is a driving principle in MRP, never order before one needs to, never allow to stockout2. EOQ/EBQ often results in higher than necessary inventories of finished goods. This in turn ties up cash, increases storage space required, requires movements and labour to carry them out, increases the possibility of redundant or damaged stock, and reduces flexibility of response. Read More